Grant Robertson: Speech to Labour Party Conference

Posted by Grant Robertson on November 07, 2015

It is a pleasure to be back in Palmerston North, the city of my birth. It is true to say that my family left Palmy reasonably soon thereafter, but there is no truth to the rumour that as a 16 month old I went to my mother to request a transfer!

Coming to Palmerston North these days is to see a city and region that is bursting with potential. A strong university, science organisations to build on on the primary industry base, the potential for new and innovative businesses. Now, if we could just get a government that backs the regions!

Delegates, it is school prize giving season. For anyone cynical about future generations, attendance at these is a life-affirming experience. They are heart-warming celebrations of success, albeit a bit of a marathon for parents and unsuspecting MPs.

Success comes in many forms at these prizegivings. From the students winning subject prizes, to the awards for leadership, sporting and cultural achievements, to the students who have proudly made it through five years of school. All of them are celebrated, because as one principal put it to me, we don’t judge our success on the marks our dux gets, we judge our success on producing a cohort of confident, resilient young people.

But how do we judge the success of the economy? There are many people devoting many column inches every day to opining on this. Every morning we hear or read of the rises and falls of stocks and the trade weighted index.

We hear about businesses that do well, and not so well, we hear about who is and isn’t on this year’s Rich List and what they are worth.

They are all measures that tell us something about our economy, but are they adequate to measure its success?

From this government - we hear about the surplus. The yardstick they set to decide if they are good managers of the economy. Success has been declared, and job done so far as Bill English is concerned.

Well, if you ever wanted evidence that some measures of success in our economy might not be all that they appear, then this is it. Having set the political target of a surplus in 2014/15, a political solution was found to make it happen.

The Earthquake Commission returned nearly half a billion dollars to the Crown accounts this year because they decided they did not need it for Canterbury. Just ask the people of Christchurch if all the claims are settled and that money is not needed. It was a cynical ploy to meet a political target.

And worst of all, there is no consideration of making these surpluses sustainable. In the Labour Party we know about sustainable surpluses. We had one. Every single year when we were last in government. But not even Bill English is predicting that there will be a surplus in coming years. It was plain and simple – manufactured for one year to meet the propaganda needs of the National Party.

But, beyond the manufactured surplus, can we judge the economy a success when

151,000 New Zealanders are out of work, and the rate of unemployment is six per cent, with projections that it will head towards seven per cent next year. 151,000 people. Think about that. It is nearly twice the population of this city out of work. It is nearly 50,000 more than when National took office. In Gisborne one in every ten people is out of work. It is clear that John Key and Bill English see levels of unemployment like this as collateral damage in their blinkered economic vision.

Where exports as a percentage of GDP are now the lowest they have been since 1997, coincidentally the last time Bill English was given the keys to the car.

When wage growth is the weakest it has been since the depths of the GFC five years ago, and in the coming year working people are expecting the smallest wage increases in over a decade.

Where there is such a disparity of wealth in our country that we see some corporate CEOs paid salaries of four or five million dollars a year, while 115,000 Kiwis survive on a wage of $14.75 per hour.

Where 305,000 children grow up in homes where fridges are often empty or where their parents cannot earn enough money to buy the shoes and clothes they need.

Where the house price to income ratio for housing in our biggest city is 9:1,there is the lowest home ownership rate in 60 years, and where thousands of New Zealand families live in cold, damp, overcrowded rental accommodation, or worse in garages and sheds.

That is not success.

If Dan Carter got World Rugby Player of the Year, but the All Blacks lost the Rugby World Cup, would we be hailing the year a success?

As American businessman and philanthropist John Paul DeJoria has said, 'success unshared is failure'.

And this is not just because of our inherent sense of fairness. It makes economic sense as well. The OECD has recently joined the chorus of those who are acknowledging that a fair go for everyone means a more wealthy society. They said that the increase in income inequality in New Zealand over two decades from the 1980s had reduced our growth rate by more than 10%.

And income inequality is only part of the picture. Those statistics do not take into account wealth inequality- the assets, like houses some of us are lucky to own, and the security and choices they provide. These assets, this wealth, are now concentrated in the hands of fewer and fewer New Zealanders.

Addressing wealth and income inequality is fundamental to our future well-being as a society. As a recent report from the Centre for American Progress said “for democracies to thrive rising prosperity must be within the reach of all citizens.”

That is the challenge we must meet.

So what is a successful economy? Of course it needs careful management. Remember, while I started life here, I grew up in Dunedin and I'm from a long line of parsimonious Scottish Presbyterians. I have also taken the extra pre-caution of having the Rev Dr David Clark as my Associate Spokesperson in case I get too profligate.

In government we must be disciplined and treat each tax payer dollar with the respect for the hard work that went into earning it.

But that cannot be the end of the line. The economy does not exist for its own purposes.

The economy is not a person with feelings that we need to protect. It’s there to serve the interests of people, to be the means to a better life for all our people. It’s not an end in itself.

Many New Zealanders have expressed their concerns about the TPPA. When I listen to those concerns I hear the overwhelming feeling that the corporation matters more now than the citizen. Companies got the inside word on the negotiations and the special briefings, while ordinary people were kept in the dark with our interest treated as an irritant.

We need an approach to the economy that turns this view on its head. One where we don’t just measure the health of the government’s books but also the health of the people.

We need to embrace a new economic order- people first. A focus on prosperity- not just for some, but a chance for all to share in it.

I come to the job of Finance Spokesperson with a clear mission.

It is time to reject the idea that our country will prosper by waiting for wealth to trickle down, and instead to embrace building wealth from the ground up- through our small businesses, iwi, our regions and our innovation.

It is time to reject the idea that the success for the 1% is the best we can hope for, and embrace the value to our economy and society of a fairer share for all.

It is time to reject the idea that the government should stand aside and let the market determine the opportunity of future generations, and embrace the transformational role of government to help New Zealanders build their dreams.

It is time to reject the ethos of success based on privilege, selfishness and greed, and replace them with a fair go, opportunity and a relentless pursuit of shared prosperity.

That is our mission. The economic goal of the next Labour government will be shared prosperity- an opportunity for everyone to meet their potential.

We are a fortunate country, blessed with tremendous natural resources, and talented and driven people. New Zealand businesses and workers work harder than most of their equivalents around the world. We are in many senses already a wealthy nation.

There is an opportunity to work with businesses and regions to be prosperous, to create decent work. Our record demonstrates that when we do this, the country grows.

There is an opportunity to build an economy and in turn a society that offers the quality of life to all its citizens that is the envy of the world.

I want New Zealanders to be proud of what we make possible in our country.

The economy that I will manage on your behalf in government will have specific goals to support New Zealanders to all have the chance to build the future they dream about.

I want our success in building the path to shared prosperity to be judged in five core areas:

The opportunity for decent work wherever you live in New Zealand. Our goal will be to reduce unemployment to below 4% by the end of our first term in government. There are many changes ahead in the world of work. In the next few years we must continue to put the income, security and dignity that work provides at the forefront of our economic thinking. We must invest in our regions to create opportunities and to relieve that pressure on Auckland. We must support small business to thrive, to innovate and to provide decent work. The dramatic drop in dairy prices and the slowdown in China point to the need for urgent and aggressive support for diversification- of products and markets. The government's plan to wait for one industry to fail in order to see diversification happen is simply not good enough.

Lifting incomes. We must lift wages. There is no single silver bullet to do this, but the government can play its part through investing in the infrastructure, innovation, research and development that will help create high wage work. We can do it by lifting the minimum wage and showing leadership by ensuring that anyone who works for the government is paid a living wage. We can do it by restoring rights of workers to bargain collectively. And we can do it by preparing for the new world of work, which I will return to shortly.

Zero tolerance for child poverty. We will measure the success of our economy against how fast we can eliminate child poverty. Andrew will speak more about this tomorrow, but suffice to say that we will put that goal at the centre of our economic plan.

Access to affordable and quality housing. This is vital to reducing wealth inequality and to building safe and stable communities. We need to harness the power of the government to invest to build affordable housing. We will crack down on the speculators who are shutting people out of buying their first homes. And we must improve the quality of our rental stock and the security of tenancy.

Our ability to create a sustainable future. There is no point crowing about economic success if it comes at the cost of the environment or the well-being of future generations. Our economic approach will be dictated by what is good for the well-being of future generations, not the next news cycle. We must restart our contributions to the Super Fund as soon as possible, and build on the success of Kiwisaver. We must take urgent action to build an economy that transitions us to a low carbon economy and gets real on climate change.

This will mean moving beyond the simple measures of success that fuel the news cycle and the vanity of politicians. Measuring GDP has a place - it is a decent proxy for activity in the economy. But what does it say about the quality of that activity? The earthquakes in Canterbury were horrific events for the people who lived there- but by god they have been a boon for GDP. Earthquake recovery has contributed up to a third of the country’s growth in recent years. But waiting for natural disasters is not a plan.

We need to measure ourselves on the quality of life our economy can create, how it improves the environment, how many kids it lifts out of poverty and how we are building our prosperity for the future. They will be the benchmarks of the next Labour government.

Delegates, no issue highlights the importance of a government that is focused on shared prosperity than the Future of Work.

Massive change is underway. A report prepared by NZIER last month estimates that 45% of jobs currently in the New Zealand economy are at high risk from automation. The New Zealand Herald headline of 26 July this year was ‘Robots Cleaning Auckland Airport’. The change is happening and it is happening now.

There is no doubt that the future of work is full of opportunity. New technology is set to drive a wave of productivity and innovation that will generate significant wealth for those who seize the opportunities.

On the other hand it is also set to grow inequality and leave many behind, with work and income less secure and success more reliant than ever on having skills and expertise that you can apply widely.

In the face of this there are two paths to take. We could sit back and let the market dictate what happens to New Zealanders, we could be the passive recipients and let the wave of change sweep us along or drag us under at its will. Or we could lead the change, seize the opportunities and protect the values we hold dear while building a new path to decent work.

We have chosen the latter path The Future of Work Commission has now released all of the discussion papers that we outlined to you at regional conferences earlier this year.

We have had thousands of responses to our on-line work survey, and hundreds of submissions on the discussion papers. Along with the Lead MPs for each of our workstreams, I have spoken to dozens of businesses, unions, LECs and community groups about the Commission, and the importance of a plan for the future of work.

I even managed to be on the panel at an event organised by the Chartered Accountants Association of Australia and New Zealand that was hosted by a hologram and had a drone and a driverless car taking the attention of attendees.

Why would the accountants care about the future of work- because accountancy is one of the most at risk professions that there is. This is not just about manual labour, it is a revolution in the nature and experience of work. The changes coming from the future of work have the potential to be scary, but the opportunities are vast as well.

The Commission will produce a final report at this conference next year which will include a range of policy proposals. It’s tempting to say that we know all the answers now, but it is important to us that we spend this year listening to what New Zealanders want, fear and hope for in the future of work.

I can say this - the work of the Commission has shown us already that there is a huge desire to continue to put work at the front and centre of our future. The Labour Party was born 100 years ago next year by people who wanted their contribution at work to be fairly valued and respected. Nothing has changed in terms of our values, but much has changed in the experience of workers. We know that the future of work will look very different from the 9-5 job of the past. We need to consider a future where many workers will hold down six to eight careers, and have multiple different employers at any one time. Where being your own boss is not only more possible it will become the default position.

Paul Mason, the economics editor of the Guardian newspaper, has written a book called the End of Capitalism, which foreshadows a future of work that redefines the economic order that has governed our lives. With technology breaking down barriers to old forms of employment, and the power enabled by access to information and data, there is the opportunity for working people to take more control of their lives- to develop a new system that is defined by a shared prosperity.

Imagine for a moment if we could find a solution to the poverty wages experienced by the cleaners at Parliament, by giving them the chance to be their own bosses based on a cooperative business model. Or to support more profit sharing or so that workers can have a real stake in the organisations they work for. Or supporting social enterprises that are productive, profitable and improves the well being of people and the planet.

This is an opportunity for us in the Labour movement to once again lead and innovate. We need to be at the forefront of ensuring the new economy develops with our values at heart. New models of business are sprouting up everywhere that use technology to break down barriers. This represents the so-called peer-to-peer capitalism or the sharing economy. We have to make that technology available and support the creation of those businesses.

There are legitimate concerns about the rights of workers in less formal working environments. What appears as flexibility can actually be a front for exploitation and a loss rights and conditions. Labour would never allow that. The flexibility we strive for is to allow you to build your work around your life- not the other way around.

To take the opportunities of the future of work we need to equip our people with the knowledge and skills to adapt and thrive, ensure income security and begin to value unpaid or non-traditional forms of work.

Some clear messages are already emerging from the Commission’s consultation. We urgently need to ensure that young people are equipped with the skills and knowledge to thrive in a rapidly changing world. Information is now so readily available to us, the real focus of education, and indeed what employers are telling us they want are the soft skills- collaboration, problem solving and critical thinking.

But employers also want school leavers to have the basics well covered - a driver’s license, digital and financial literacy, entrepreneurial skills and a sense of citizenship and civics. We also urgently need to professionalise careers advice and develop it as a partnership between students, schools, businesses and training providers.

We also need to turly create life-long learning. Alvin Toffler’s words from several decades ago, have come true, “ the illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

Every worker is going to need training and re-training in the future. We need to work with businesses and workers to ensure this is possible for all, including those in small and medium businesses who traditionally struggle to fit training into their lives. We are investigating a range of options for this, but it is certain that this will be a significant outcome from the Commission.

Delegates, former Australian Prime Minister Gough Whitlam once said his country was faced with a choice between the habits and fears of the past and the demands and opportunities of the future.

As a country we face that choice today.

The challenges are real, but the opportunities enormous. Decent work, income security, lifelong learning, safe and warm homes for all and thriving and resilient regions are not only possible, but essential to a successful country.

The path to shared prosperity that we will take will be founded on opportunity and optimism. If we give every New Zealander a fair go, they will repay us many fold.

Over the coming two years together, we will develop our economic vision on that basis, and we will build for New Zealand a path to shared prosperity.